CHECK FRAUD - FORGED CHECKS PROTECTION GUIDE

COUNTERFEIT CHECKS - CREDIT CARD FRAUD

Since October 1999, we have seen a steady increase in financial fraud. Normally, from October through February is the most busy time of the year for scam artists.

If you are a consumer, you must always be extra cautious particularly in shopping center and at the ATM machines. Among the crowds will be scam artist waiting for the right moment to catch you off guard. Safety Tips to follow:

1. Should you write a check for your purchase, make sure you only provide only the necessary identification required--your name, address, phone number, and your driver license or state ID. Many merchants are now requiring your SSN. Unless you want to purchase the item from this particular merchant, DO NOT PROVIDE YOUR SOCIAL SECURITY NUMBER, go somewhere else,
2. Take your time at the counter. Make sure you retrieve your ID or Driver License, credit card and your credit slip after your purchase,
3. Secure your receipts in a safe place on your person as you shop. A scam artist can have a heyday with a lost credit slip,
4. Your pocketbook should always be securely closed and if available with a shoulder strap, it should be criss-crossed over your shoulder.
5. If you are a business merchant you must remember that credit card fraud and check fraud will be you biggest enemy in the course of your business trade.
   
   

Let your guard down, I assure you that regardless the amount of sales you make, losses to credit card and check fraud can make or break you. Put your staff on HIGH alert. You need to train your sales clerk in the acceptance of checks and credit cards. If you are not sure what to teach them, ask your banker or local law enforcement what information is needed from your customer at the point of sale.

CHECK FRAUD - FORGED CHECKS PROTECTION GUIDE

COUNTERFEIT CHECKS - CREDIT CARD FRAUD

Since October 1999, we have seen a steady increase in financial fraud. Normally, from October through February is the most busy time of the year for scam artists.

If you are a consumer, you must always be extra cautious particularly in shopping center and at the ATM machines. Among the crowds will be scam artist waiting for the right moment to catch you off guard. Safety Tips to follow:

1. Should you write a check for your purchase, make sure you only provide only the necessary identification required--your name, address, phone number, and your driver license or state ID. Many merchants are now requiring your SSN. Unless you want to purchase the item from this particular merchant, DO NOT PROVIDE YOUR SOCIAL SECURITY NUMBER, go somewhere else,
2. Take your time at the counter. Make sure you retrieve your ID or Driver License, credit card and your credit slip after your purchase,
3. Secure your receipts in a safe place on your person as you shop. A scam artist can have a heyday with a lost credit slip,
4. Your pocketbook should always be securely closed and if available with a shoulder strap, it should be criss-crossed over your shoulder.
5. If you are a business merchant you must remember that credit card fraud and check fraud will be you biggest enemy in the course of your business trade.
   
   

Let your guard down, I assure you that regardless the amount of sales you make, losses to credit card and check fraud can make or break you. Put your staff on HIGH alert. You need to train your sales clerk in the acceptance of checks and credit cards. If you are not sure what to teach them, ask your banker or local law enforcement what information is needed from your customer at the point of sale.

Fake Check Scam

The National Consumers League (NCL) has joined with the American Bankers Association (ABA) in warning consumers of the growing problem of fake check scams.

Based on complaints reported to NCL’s National Fraud Information Center/Internet Fraud Watch database since last December, when the fake check category was added, these scams are now the sixth most common Internet fraud. Consumers who reported fake check scams to NCL’s fraud programs between January 1 and June 30, 2004 lost an average of $5,000. In many cases, the contact is initiated by email.

The Scam

There are many variations of the fake check scam, but the common thread is a stranger proposing to send the victim a check and have the victim wire money in return. “It may start with someone offering to buy something you advertised for sale, pay you to work at home, or give you an advance on a sweepstakes you won,” explained Susan Grant, director of NCL’s National Fraud Information Center and Internet Fraud Watch programs. “Whatever the set-up is, the bottom line is if someone you don’t know wants to pay you by check but wants you to wire money back, it’s a scam.”

Often the crooks claim to be in other countries and say it’s too difficult to make payment directly, so they’ll have someone in the U.S. who owes them money send the victim a check. The amount of the check is more than the victim is owed, so the victim is instructed to deposit the check and wire the excess back. Or scammers may tell victims to wire some of the money back as fees to collect their “winnings.”

The checks sent to victims are forgeries, but they’re so realistic that even bank tellers may be fooled. By the time the checks bounce, the victims have already wired the money to the crooks. Because bank customers are responsible for the checks they deposit, the victims of these scams are left to repay the bank the money they withdrew against the bad check.

“Federal law requires banks to make the funds you deposit available quickly, but it’s important for consumers to know that just because you can withdraw the money doesn’t mean the check is good,” said Edward Yingling, executive vice president for ABA. “We want to help prevent victimization by alerting consumers and bank personnel to this fraud.”

 NCL and the ABA have partnered to create new tips at NCL’s www.fraud.org Web site about fake check scams and are conducting educational outreach to both consumers and bank personnel. Consumers should be aware that:

There is no legitimate reason for someone who is giving you money to ask you to wire money back;

Just because you can withdraw the money doesn’t mean the check is good, even if it’s a cashier’s check;

If a stranger wants to pay you for something, insist on a cashier’s check for the exact amount, preferably from a local bank or one with a branch in your area.

For more details about how fake check scams work and how to avoid them, visit the telemarketing or Internet fraud section of www.fraud.org.

Fake Check Scam

The National Consumers League (NCL) has joined with the American Bankers Association (ABA) in warning consumers of the growing problem of fake check scams.

Based on complaints reported to NCL’s National Fraud Information Center/Internet Fraud Watch database since last December, when the fake check category was added, these scams are now the sixth most common Internet fraud. Consumers who reported fake check scams to NCL’s fraud programs between January 1 and June 30, 2004 lost an average of $5,000. In many cases, the contact is initiated by email.

The Scam

There are many variations of the fake check scam, but the common thread is a stranger proposing to send the victim a check and have the victim wire money in return. “It may start with someone offering to buy something you advertised for sale, pay you to work at home, or give you an advance on a sweepstakes you won,” explained Susan Grant, director of NCL’s National Fraud Information Center and Internet Fraud Watch programs. “Whatever the set-up is, the bottom line is if someone you don’t know wants to pay you by check but wants you to wire money back, it’s a scam.”

Often the crooks claim to be in other countries and say it’s too difficult to make payment directly, so they’ll have someone in the U.S. who owes them money send the victim a check. The amount of the check is more than the victim is owed, so the victim is instructed to deposit the check and wire the excess back. Or scammers may tell victims to wire some of the money back as fees to collect their “winnings.”

The checks sent to victims are forgeries, but they’re so realistic that even bank tellers may be fooled. By the time the checks bounce, the victims have already wired the money to the crooks. Because bank customers are responsible for the checks they deposit, the victims of these scams are left to repay the bank the money they withdrew against the bad check.

“Federal law requires banks to make the funds you deposit available quickly, but it’s important for consumers to know that just because you can withdraw the money doesn’t mean the check is good,” said Edward Yingling, executive vice president for ABA. “We want to help prevent victimization by alerting consumers and bank personnel to this fraud.”

 NCL and the ABA have partnered to create new tips at NCL’s www.fraud.org Web site about fake check scams and are conducting educational outreach to both consumers and bank personnel. Consumers should be aware that:

There is no legitimate reason for someone who is giving you money to ask you to wire money back;

Just because you can withdraw the money doesn’t mean the check is good, even if it’s a cashier’s check;

If a stranger wants to pay you for something, insist on a cashier’s check for the exact amount, preferably from a local bank or one with a branch in your area.

For more details about how fake check scams work and how to avoid them, visit the telemarketing or Internet fraud section of www.fraud.org.

Get Guide That How to avoid a counterfeit check scam?

It’s your lucky day! You just won a foreign lottery! The letter says so. And the cashier’s check to cover the taxes and fees is included. All you have to do to get your winnings is deposit the check and wire the money to the sender to pay the taxes and fees. You’re guaranteed that when they get your payment, you’ll get your prize.

There’s just one catch: this is a scam. The check is no good, even though it appears to be a legitimate cashier’s check. The lottery angle is a trick to get you to wire money to someone you don’t know. If you were to deposit the check and wire the money, your bank would soon learn that the check was a fake. And you’re out the money because the money you wired can’t be retrieved, and you’re responsible for the checks you deposit — even though you don’t know they’re fake. This is just one example of a counterfeit check scam that could leave you scratching your head. The Federal Trade Commission, the nation’s consumer protection agency, wants you to know that counterfeit check scams are on the rise. Some fake checks look so real that bank tellers are reporting being fooled. The scammers use high quality printers and scanners to make the checks look real. Some of the checks contain authentic-looking watermarks. These counterfeit checks are printed with the names and addresses of legitimate financial institutions. And even though the bank and account and routing numbers listed on a counterfeit check may be real, the check still can be a fake. These fakes come in many forms, from cashier’s checks and money orders to corporate and personal checks. Could you be a victim? Not if you know how to recognize and report them.

Fake Checks: Variations on a Scheme

Counterfeit or fake checks are being used in a growing number of fraudulent schemes, including foreign lottery scams (as described above), check overpayment scams, Internet auction scams, and secret shopper scams.

Check overpayment scams target consumers selling cars or other valuable items through classified ads or online auction sites. Unsuspecting sellers get stuck when scammers pass off bogus cashier’s checks, corporate checks, or personal checks. Here’s how it happens:

A scam artist replies to a classified ad or auction posting, offers to pay for the item with a check, and then comes up with a reason for writing the check for more than the purchase price. The scammer asks the seller to wire back the difference after depositing the check. The seller does it, and later, when the scammer’s check bounces, the seller is left liable for the entire amount.

In secret shopper scams, the consumer, hired to be a secret shopper, is asked to evaluate the effectiveness of a money transfer service. The consumer is given a check, told to deposit it in their bank account, and withdraw the amount in cash. Then, the consumer is told to take the cash to the money transfer service specified, and typically, send the transfer to a person in a Canadian city. Then, the consumer is supposed to evaluate their experience — but no one collects the evaluation. The secret shopper scenario is just a scam to get the consumer’s money.

Con artists who use these schemes can easily avoid detection. When funds are sent through wire transfer services, the recipients can pick up the money at other locations within the same country; it is nearly impossible for the sender to identify or locate the recipient.

You and Your Bank — Who is Responsible for What?

Under federal law, banks must make funds available to you from U.S. Treasury checks, official bank checks (cashier’s checks, certified checks, and teller’s checks), and checks paid by government agencies at the opening of business the day after you deposit the check. For other checks, banks must similarly make the first $100 available the day after you deposit the check. Remaining funds must be made available on the second day after the deposit if payable by a local bank, and within five days if drawn on distant banks.

However, just because funds are available on a check you’ve deposited doesn’t mean the check is good. It’s best not to rely on money from any type of check (cashier, business or personal check, or money order) unless you know and trust the person you’re dealing with or, better yet — until the bank confirms that the check has cleared. Forgeries can take weeks to be discovered and untangled. The bottom line is that until the bank confirms that the funds from the check have been deposited into your account, you are responsible for any funds you withdraw against that check.

Protecting Yourself

Here’s how to avoid a counterfeit check scam:

Throw away any offer that asks you to pay for a prize or a gift. If it’s free or a gift, you shouldn’t have to pay for it. Free is free.
Resist the urge to enter foreign lotteries. It’s illegal to play a foreign lottery through the mail or the telephone, and most foreign lottery solicitations are phony.
Know who you’re dealing with, and never wire money to strangers.
If you’re selling something, don’t accept a check for more than the selling price, no matter how tempting the offer or how convincing the story. Ask the buyer to write the check for the correct amount. If the buyer refuses to send the correct amount, return the check. Don’t send the merchandise.
As a seller, you can suggest an alternative way for the buyer to pay, like an escrow service or online payment service. There may be a charge for an escrow service. If the buyer insists on using a particular escrow or online payment service you’ve never heard of, check it out. Visit its website, and read its terms of agreement and privacy policy. Call the customer service line. If there isn’t one — or if you call and can’t get answers about the service’s reliability — don’t use the service. To learn more about escrow services and online payment systems, visit ftc.gov/onlineshopping.
If you accept payment by check, ask for a check drawn on a local bank, or a bank with a local branch. That way, you can make a personal visit to make sure the check is valid. If that’s not possible, call the bank where the check was purchased, and ask if it is valid. Get the bank’s phone number from directory assistance or an Internet site that you know and trust, not from the check or from the person who gave you the check.
If the buyer insists that you wire back funds, end the transaction immediately. Legitimate buyers don’t pressure you to send money by wire transfer services. In addition, you have little recourse if there’s a problem with a wire transaction.
Resist any pressure to “act now.” If the buyer’s offer is good now, it should be good after the check clears.
If You Think You’re a Victim

If you think you’ve been targeted by a counterfeit check scam, report it to the following agencies:

The Federal Trade Commission Visit ftc.gov or 1-877-FTC-HELP (1-877-382-4357). • The U.S. Postal Inspection Service Visit www.usps.gov/websites/depart/inspect or call your local post office. The number is in the Blue Pages of your local telephone directory.
Your state or local consumer protection agencies Visit www.naag.org for a list of state Attorneys General, or check the Blue Pages of your local telephone directory for appropriate phone numbers.
For More Information

The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a new video, How to File a Complaint, at ftc.gov/video to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

Get Guide That How to avoid a counterfeit check scam?

It’s your lucky day! You just won a foreign lottery! The letter says so. And the cashier’s check to cover the taxes and fees is included. All you have to do to get your winnings is deposit the check and wire the money to the sender to pay the taxes and fees. You’re guaranteed that when they get your payment, you’ll get your prize.

There’s just one catch: this is a scam. The check is no good, even though it appears to be a legitimate cashier’s check. The lottery angle is a trick to get you to wire money to someone you don’t know. If you were to deposit the check and wire the money, your bank would soon learn that the check was a fake. And you’re out the money because the money you wired can’t be retrieved, and you’re responsible for the checks you deposit — even though you don’t know they’re fake. This is just one example of a counterfeit check scam that could leave you scratching your head. The Federal Trade Commission, the nation’s consumer protection agency, wants you to know that counterfeit check scams are on the rise. Some fake checks look so real that bank tellers are reporting being fooled. The scammers use high quality printers and scanners to make the checks look real. Some of the checks contain authentic-looking watermarks. These counterfeit checks are printed with the names and addresses of legitimate financial institutions. And even though the bank and account and routing numbers listed on a counterfeit check may be real, the check still can be a fake. These fakes come in many forms, from cashier’s checks and money orders to corporate and personal checks. Could you be a victim? Not if you know how to recognize and report them.

Fake Checks: Variations on a Scheme

Counterfeit or fake checks are being used in a growing number of fraudulent schemes, including foreign lottery scams (as described above), check overpayment scams, Internet auction scams, and secret shopper scams.

Check overpayment scams target consumers selling cars or other valuable items through classified ads or online auction sites. Unsuspecting sellers get stuck when scammers pass off bogus cashier’s checks, corporate checks, or personal checks. Here’s how it happens:

A scam artist replies to a classified ad or auction posting, offers to pay for the item with a check, and then comes up with a reason for writing the check for more than the purchase price. The scammer asks the seller to wire back the difference after depositing the check. The seller does it, and later, when the scammer’s check bounces, the seller is left liable for the entire amount.

In secret shopper scams, the consumer, hired to be a secret shopper, is asked to evaluate the effectiveness of a money transfer service. The consumer is given a check, told to deposit it in their bank account, and withdraw the amount in cash. Then, the consumer is told to take the cash to the money transfer service specified, and typically, send the transfer to a person in a Canadian city. Then, the consumer is supposed to evaluate their experience — but no one collects the evaluation. The secret shopper scenario is just a scam to get the consumer’s money.

Con artists who use these schemes can easily avoid detection. When funds are sent through wire transfer services, the recipients can pick up the money at other locations within the same country; it is nearly impossible for the sender to identify or locate the recipient.

You and Your Bank — Who is Responsible for What?

Under federal law, banks must make funds available to you from U.S. Treasury checks, official bank checks (cashier’s checks, certified checks, and teller’s checks), and checks paid by government agencies at the opening of business the day after you deposit the check. For other checks, banks must similarly make the first $100 available the day after you deposit the check. Remaining funds must be made available on the second day after the deposit if payable by a local bank, and within five days if drawn on distant banks.

However, just because funds are available on a check you’ve deposited doesn’t mean the check is good. It’s best not to rely on money from any type of check (cashier, business or personal check, or money order) unless you know and trust the person you’re dealing with or, better yet — until the bank confirms that the check has cleared. Forgeries can take weeks to be discovered and untangled. The bottom line is that until the bank confirms that the funds from the check have been deposited into your account, you are responsible for any funds you withdraw against that check.

Protecting Yourself

Here’s how to avoid a counterfeit check scam:

Throw away any offer that asks you to pay for a prize or a gift. If it’s free or a gift, you shouldn’t have to pay for it. Free is free.
Resist the urge to enter foreign lotteries. It’s illegal to play a foreign lottery through the mail or the telephone, and most foreign lottery solicitations are phony.
Know who you’re dealing with, and never wire money to strangers.
If you’re selling something, don’t accept a check for more than the selling price, no matter how tempting the offer or how convincing the story. Ask the buyer to write the check for the correct amount. If the buyer refuses to send the correct amount, return the check. Don’t send the merchandise.
As a seller, you can suggest an alternative way for the buyer to pay, like an escrow service or online payment service. There may be a charge for an escrow service. If the buyer insists on using a particular escrow or online payment service you’ve never heard of, check it out. Visit its website, and read its terms of agreement and privacy policy. Call the customer service line. If there isn’t one — or if you call and can’t get answers about the service’s reliability — don’t use the service. To learn more about escrow services and online payment systems, visit ftc.gov/onlineshopping.
If you accept payment by check, ask for a check drawn on a local bank, or a bank with a local branch. That way, you can make a personal visit to make sure the check is valid. If that’s not possible, call the bank where the check was purchased, and ask if it is valid. Get the bank’s phone number from directory assistance or an Internet site that you know and trust, not from the check or from the person who gave you the check.
If the buyer insists that you wire back funds, end the transaction immediately. Legitimate buyers don’t pressure you to send money by wire transfer services. In addition, you have little recourse if there’s a problem with a wire transaction.
Resist any pressure to “act now.” If the buyer’s offer is good now, it should be good after the check clears.
If You Think You’re a Victim

If you think you’ve been targeted by a counterfeit check scam, report it to the following agencies:

The Federal Trade Commission Visit ftc.gov or 1-877-FTC-HELP (1-877-382-4357). • The U.S. Postal Inspection Service Visit www.usps.gov/websites/depart/inspect or call your local post office. The number is in the Blue Pages of your local telephone directory.
Your state or local consumer protection agencies Visit www.naag.org for a list of state Attorneys General, or check the Blue Pages of your local telephone directory for appropriate phone numbers.
For More Information

The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a new video, How to File a Complaint, at ftc.gov/video to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

Top 10 Tips for Recognizing and Avoiding Fake Check Scams

 If someone you don’t know wants to pay you by check but wants you to wire some of the money back, beware! It’s a scam that could cost you thousands of dollars. 

·        There are many variations of the fake check scam. 

      It could start with someone offering to buy something you advertised, pay you to do work at home, give you an “advance” on a sweepstakes you’ve supposedly won, or pay the first installment on the millions that you’ll receive for agreeing to have money in a foreign country transferred to your bank account for safekeeping. Whatever the pitch, the person may sound quite believable.

·        Fake check scammers hunt for victims. 

      They scan newspaper and online advertisements for people listing items for sale, and check postings on online job sites from people seeking employment. They place their own ads with phone numbers or email addresses for people to contact them. And they call or send emails or faxes to people randomly, knowing that some will take the bait.

·        They often claim to be in another country. 

      The scammers say it’s too difficult and complicated to send you the money directly from their country, so they’ll arrange for someone in the U.S. to send you a check.

·        They tell you to wire money to them after you’ve deposited the check.

     If you’re selling something, they say they’ll pay you by having someone in the U.S. who owes them money send you a check. It will be for more than the sale price; you deposit the check, keep what you’re owed, and wire the rest to them. If it’s part of a work-at-home scheme, they may claim that you’ll be processing checks from their “clients.” You deposit the checks and then wire them the money minus your “pay.” Or they may send you a check for more than your pay “by mistake” and ask you to wire them the excess. In the sweepstakes and foreign money offer variations of the scam, they tell you to wire them money for taxes, customs, bonding, processing, legal fees, or other expenses that must be paid before you can get the rest of the money.

·        The checks are fake but they look real. 

      In fact, they look so real that even bank tellers may be fooled. Some are phony cashiers checks, others look like they’re from legitimate business accounts. The companies whose names appear may be real, but someone has dummied up the checks without their knowledge.

·        You don’t have to wait long to use the money, but that doesn’t mean the check is good. Under federal law, banks have to make the funds you deposit available quickly – usually within one to five days, depending on the type of check. But just because you can withdraw the money doesn’t mean the check is good, even if it’s a cashier’s check. It can take weeks for the forgery to be discovered and the check to bounce. 

·        You are responsible for the checks you deposit. 

      That’s because you’re in the best position to determine the risk – you’re the one dealing directly with the person who is arranging for the check to be sent to you. When a check bounces, the bank deducts the amount that was originally credited to your account. If there isn’t enough to cover it, the bank may be able to take money from other accounts you have at that institution, or sue you to recover the funds. In some cases, law enforcement authorities could bring charges against the victims because it may look like they were involved in the scam and knew the check was counterfeit.

·        There is no legitimate reason for someone who is giving you money to ask you to wire money back.

      If a stranger wants to pay you for something, insist on a cashiers check for the exact amount, preferably from a local bank or a bank that has a branch in your area.

·        Don’t deposit it – report it! 

      Report fake check scams to NCL's Fraud Center, at www.fraud.org. That information will be transmitted to the appropriate law enforcement agencies.               

Top 10 Tips for Recognizing and Avoiding Fake Check Scams

 If someone you don’t know wants to pay you by check but wants you to wire some of the money back, beware! It’s a scam that could cost you thousands of dollars. 

·        There are many variations of the fake check scam. 

      It could start with someone offering to buy something you advertised, pay you to do work at home, give you an “advance” on a sweepstakes you’ve supposedly won, or pay the first installment on the millions that you’ll receive for agreeing to have money in a foreign country transferred to your bank account for safekeeping. Whatever the pitch, the person may sound quite believable.

·        Fake check scammers hunt for victims. 

      They scan newspaper and online advertisements for people listing items for sale, and check postings on online job sites from people seeking employment. They place their own ads with phone numbers or email addresses for people to contact them. And they call or send emails or faxes to people randomly, knowing that some will take the bait.

·        They often claim to be in another country. 

      The scammers say it’s too difficult and complicated to send you the money directly from their country, so they’ll arrange for someone in the U.S. to send you a check.

·        They tell you to wire money to them after you’ve deposited the check.

     If you’re selling something, they say they’ll pay you by having someone in the U.S. who owes them money send you a check. It will be for more than the sale price; you deposit the check, keep what you’re owed, and wire the rest to them. If it’s part of a work-at-home scheme, they may claim that you’ll be processing checks from their “clients.” You deposit the checks and then wire them the money minus your “pay.” Or they may send you a check for more than your pay “by mistake” and ask you to wire them the excess. In the sweepstakes and foreign money offer variations of the scam, they tell you to wire them money for taxes, customs, bonding, processing, legal fees, or other expenses that must be paid before you can get the rest of the money.

·        The checks are fake but they look real. 

      In fact, they look so real that even bank tellers may be fooled. Some are phony cashiers checks, others look like they’re from legitimate business accounts. The companies whose names appear may be real, but someone has dummied up the checks without their knowledge.

·        You don’t have to wait long to use the money, but that doesn’t mean the check is good. Under federal law, banks have to make the funds you deposit available quickly – usually within one to five days, depending on the type of check. But just because you can withdraw the money doesn’t mean the check is good, even if it’s a cashier’s check. It can take weeks for the forgery to be discovered and the check to bounce. 

·        You are responsible for the checks you deposit. 

      That’s because you’re in the best position to determine the risk – you’re the one dealing directly with the person who is arranging for the check to be sent to you. When a check bounces, the bank deducts the amount that was originally credited to your account. If there isn’t enough to cover it, the bank may be able to take money from other accounts you have at that institution, or sue you to recover the funds. In some cases, law enforcement authorities could bring charges against the victims because it may look like they were involved in the scam and knew the check was counterfeit.

·        There is no legitimate reason for someone who is giving you money to ask you to wire money back.

      If a stranger wants to pay you for something, insist on a cashiers check for the exact amount, preferably from a local bank or a bank that has a branch in your area.

·        Don’t deposit it – report it! 

      Report fake check scams to NCL's Fraud Center, at www.fraud.org. That information will be transmitted to the appropriate law enforcement agencies.               

Protection Guide from Fake check scam

Here’s how to avoid a counterfeit check scam:

• Don't pay by check! Credit cards are much safer.
• Never pay any "fees" for prizes. Throw away any offer that asks you to pay for a prize or a gift. If it’s free or a gift, you shouldn’t have to pay for it. Free is free.
• Do NOT to enter foreign lotteries. It’s illegal to play a foreign lottery through the mail or the telephone, and most foreign lottery solicitations are phony.
• Never wire money to strangers.  If a "lottery", "promotion" or buyer insists that you wire back funds, end the transaction immediately. Legitimate buyers don’t pressure you to send money by wire transfer services. In addition, you have little recourse if there’s a problem with a wire transaction.
  
  
• If you’re selling something, don’t accept a check for more than the selling price, no matter how tempting the offer or how convincing the story. Ask the buyer to write the check for the correct amount. If the buyer refuses to send the correct amount, return the check. Don’t send the merchandise.
• Use Escrow Services: As a seller, you can suggest an alternative way for the buyer to pay, like an escrow service or online payment service. There may be a charge for an escrow service. If the buyer insists on using a particular escrow or online payment service you’ve never heard of, check it out. Visit its website, and read its terms of agreement and privacy policy. Call the customer service line. If there isn’t one — or if you call and can’t get answers about the service’s reliability — don’t use the service. To learn more about escrow services and online payment systems, see this page.
• Only take checks from local banks - If you accept payment by check, ask for a check drawn on a local bank, or a bank with a local branch. That way, you can make a personal visit to make sure the check is valid. If that’s not possible, call the bank where the check was purchased, and ask if it is valid. Get the bank’s phone number from directory assistance or an Internet site that you know and trust, not from the check or from the person who gave you the check.
• Resist any pressure to “act now.” If the lottery is real or the buyer’s offer is good now, it should be good after the check clears.

Protection Guide from Fake check scam

Here’s how to avoid a counterfeit check scam:

• Don't pay by check! Credit cards are much safer.
• Never pay any "fees" for prizes. Throw away any offer that asks you to pay for a prize or a gift. If it’s free or a gift, you shouldn’t have to pay for it. Free is free.
• Do NOT to enter foreign lotteries. It’s illegal to play a foreign lottery through the mail or the telephone, and most foreign lottery solicitations are phony.
• Never wire money to strangers.  If a "lottery", "promotion" or buyer insists that you wire back funds, end the transaction immediately. Legitimate buyers don’t pressure you to send money by wire transfer services. In addition, you have little recourse if there’s a problem with a wire transaction.
  
  
• If you’re selling something, don’t accept a check for more than the selling price, no matter how tempting the offer or how convincing the story. Ask the buyer to write the check for the correct amount. If the buyer refuses to send the correct amount, return the check. Don’t send the merchandise.
• Use Escrow Services: As a seller, you can suggest an alternative way for the buyer to pay, like an escrow service or online payment service. There may be a charge for an escrow service. If the buyer insists on using a particular escrow or online payment service you’ve never heard of, check it out. Visit its website, and read its terms of agreement and privacy policy. Call the customer service line. If there isn’t one — or if you call and can’t get answers about the service’s reliability — don’t use the service. To learn more about escrow services and online payment systems, see this page.
• Only take checks from local banks - If you accept payment by check, ask for a check drawn on a local bank, or a bank with a local branch. That way, you can make a personal visit to make sure the check is valid. If that’s not possible, call the bank where the check was purchased, and ask if it is valid. Get the bank’s phone number from directory assistance or an Internet site that you know and trust, not from the check or from the person who gave you the check.
• Resist any pressure to “act now.” If the lottery is real or the buyer’s offer is good now, it should be good after the check clears.

Who Is Responsible to Verify the Checks?

Under federal law, banks must make funds available to you from U.S. Treasury checks, official bank checks (cashier’s checks, certified checks, and teller’s checks), and checks paid by government agencies at the opening of business the day after you deposit the check. For other checks, banks must similarly make the first $100 available the day after you deposit the check. Remaining funds must be made available on the second day after the deposit if payable by a local bank, and within five days if drawn on distant banks.

However, just because funds are available on a check you’ve deposited doesn’t mean the check is good. It’s best not to rely on money from any type of check (cashier, business or personal check, or money order) unless you know and trust the person you’re dealing with or, better yet — until the bank confirms that the check has cleared. Forgeries can take weeks to be discovered and untangled. The bottom line is that until the bank confirms that the funds from the check have been deposited into your account, you are responsible for any funds you withdraw against that check.

Who Is Responsible to Verify the Checks?

Under federal law, banks must make funds available to you from U.S. Treasury checks, official bank checks (cashier’s checks, certified checks, and teller’s checks), and checks paid by government agencies at the opening of business the day after you deposit the check. For other checks, banks must similarly make the first $100 available the day after you deposit the check. Remaining funds must be made available on the second day after the deposit if payable by a local bank, and within five days if drawn on distant banks.

However, just because funds are available on a check you’ve deposited doesn’t mean the check is good. It’s best not to rely on money from any type of check (cashier, business or personal check, or money order) unless you know and trust the person you’re dealing with or, better yet — until the bank confirms that the check has cleared. Forgeries can take weeks to be discovered and untangled. The bottom line is that until the bank confirms that the funds from the check have been deposited into your account, you are responsible for any funds you withdraw against that check.

Get Check overpayment scams Guide

These target consumers selling cars or other valuable items through classified ads or online auction sites. Unsuspecting sellers get stuck when scammers pass off bogus cashier’s checks, corporate checks, or personal checks. Here’s how it happens:

A scam artist replies to a classified ad or auction posting, offers to pay for the item with a check, and then comes up with a reason for writing the check for more than the purchase price. The scammer asks the seller to wire back the difference after depositing the check. The seller does it, and later, when the scammer’s check bounces, the seller is left liable for the entire amount.

Secret shopper scams

The consumer, hired to be a secret shopper, is asked to evaluate the effectiveness of a money transfer service. The consumer is given a check, told to deposit it in their bank account, and withdraw the amount in cash. Then, the consumer is told to take the cash to the money transfer service specified, and typically, send the transfer to a person in a Canadian city. Then, the consumer is supposed to evaluate their experience — but no one collects the evaluation. The secret shopper scenario is just a scam to get the consumer’s money.

Con artists who use these schemes can easily avoid detection. When funds are sent through wire transfer services, like Western Union, the recipients can pick up the money at other locations within the same country; it is nearly impossible for the sender to identify or locate the recipient.

Get Check overpayment scams Guide

These target consumers selling cars or other valuable items through classified ads or online auction sites. Unsuspecting sellers get stuck when scammers pass off bogus cashier’s checks, corporate checks, or personal checks. Here’s how it happens:

A scam artist replies to a classified ad or auction posting, offers to pay for the item with a check, and then comes up with a reason for writing the check for more than the purchase price. The scammer asks the seller to wire back the difference after depositing the check. The seller does it, and later, when the scammer’s check bounces, the seller is left liable for the entire amount.

Secret shopper scams

The consumer, hired to be a secret shopper, is asked to evaluate the effectiveness of a money transfer service. The consumer is given a check, told to deposit it in their bank account, and withdraw the amount in cash. Then, the consumer is told to take the cash to the money transfer service specified, and typically, send the transfer to a person in a Canadian city. Then, the consumer is supposed to evaluate their experience — but no one collects the evaluation. The secret shopper scenario is just a scam to get the consumer’s money.

Con artists who use these schemes can easily avoid detection. When funds are sent through wire transfer services, like Western Union, the recipients can pick up the money at other locations within the same country; it is nearly impossible for the sender to identify or locate the recipient.

the fake check / cheque scam working Procedure

The check is no good, even though it appears to be a legitimate cashier’s check. The lottery or Ebay seller or "payment transfer" job angle is a trick to get you to wire (Western Union or MoneyGram) money to someone you don’t know.

If you deposit the check and wire the money, your bank would soon (several days to as long as 6 weeks) learn that the check was a fake. And when the check finally clears the system and bounces, you’re out the money because

• the money you wired can’t be retrieved, and
• you’re responsible for any check you deposit — even though you can’t know whether they're fake or genuine.

These are very important points.  The checks may look real and even have real account numbers on them.  Your bank may be able to confirm that the bank it is drawn against is real and the account is also real.  But that does not mean that the check itself is genuine.

For example, it could be a simple forgery.

• Someone stole the blank checkbook and write forged checks. 
• Or a criminal stole checks that were delivered to a person's mailbox.
• Or a criminal, working as a clerk in a store, copied down your account number and bank when you paid by check, and used this information to make forgeries.

See the movie "Catch Me If You Can", starring Leonardo DiCaprio, for a good example of how this was done even 40 years ago.  Modern computer, scanner and printer technologies make it very easy for criminals to make real looking forged checks.

Many fake checks look so real that bank tellers are reporting being fooled. The scammers use high quality printers and scanners to make the checks look real. Some of the checks contain authentic-looking watermarks. These counterfeit checks are printed with the names and addresses of legitimate financial institutions. And even though the bank and account and routing numbers listed on a counterfeit check may be real, the check still can be a fake.

These fakes come in many forms:

• cashier’s checks
• money orders
• corporate
• personal checks.

This is just one example of a counterfeit check scam that could leave you scratching your head. The Federal Trade Commission, the nation’s consumer protection agency, wants you to know that counterfeit check scams are on the rise.

Fake Checks: Variations on a Scheme

Counterfeit or fake checks are being used in a growing number of fraudulent schemes, such as:

• foreign lottery scams (as described above),
• check overpayment scams,
• Work from home scammers (eg. payment transfer manager)
• Internet auction scams, and
• secret shopper scams.

the fake check / cheque scam working Procedure

The check is no good, even though it appears to be a legitimate cashier’s check. The lottery or Ebay seller or "payment transfer" job angle is a trick to get you to wire (Western Union or MoneyGram) money to someone you don’t know.

If you deposit the check and wire the money, your bank would soon (several days to as long as 6 weeks) learn that the check was a fake. And when the check finally clears the system and bounces, you’re out the money because

• the money you wired can’t be retrieved, and
• you’re responsible for any check you deposit — even though you can’t know whether they're fake or genuine.

These are very important points.  The checks may look real and even have real account numbers on them.  Your bank may be able to confirm that the bank it is drawn against is real and the account is also real.  But that does not mean that the check itself is genuine.

For example, it could be a simple forgery.

• Someone stole the blank checkbook and write forged checks. 
• Or a criminal stole checks that were delivered to a person's mailbox.
• Or a criminal, working as a clerk in a store, copied down your account number and bank when you paid by check, and used this information to make forgeries.

See the movie "Catch Me If You Can", starring Leonardo DiCaprio, for a good example of how this was done even 40 years ago.  Modern computer, scanner and printer technologies make it very easy for criminals to make real looking forged checks.

Many fake checks look so real that bank tellers are reporting being fooled. The scammers use high quality printers and scanners to make the checks look real. Some of the checks contain authentic-looking watermarks. These counterfeit checks are printed with the names and addresses of legitimate financial institutions. And even though the bank and account and routing numbers listed on a counterfeit check may be real, the check still can be a fake.

These fakes come in many forms:

• cashier’s checks
• money orders
• corporate
• personal checks.

This is just one example of a counterfeit check scam that could leave you scratching your head. The Federal Trade Commission, the nation’s consumer protection agency, wants you to know that counterfeit check scams are on the rise.

Fake Checks: Variations on a Scheme

Counterfeit or fake checks are being used in a growing number of fraudulent schemes, such as:

• foreign lottery scams (as described above),
• check overpayment scams,
• Work from home scammers (eg. payment transfer manager)
• Internet auction scams, and
• secret shopper scams.

Counterfeit check from Internet source security guide

Think of it as one more reason not to write checks. Hackers believed to be operating out of Russia have figured out a high-tech way to carry out the decidedly low-tech crime of check fraud, a computer security company says — writing at least $9 million in fakes against more than 1,200 legitimate accounts.

But these hackers got the account information in an unusual way: They broke into three websites that specialize in a little-known type of business — archiving check images online.

Check counterfeiting is a crime that savvy Internet criminals usually pass up. After all, it's far easier for them to make money by stealing credit cards and online banking passwords.

The scam was discovered by SecureWorks Inc., an Atlanta computer security company. The organization says it is working with the FBI and says the hackers have not been caught.

Retailers and other businesses use the sites to store records of all the checks they write. Check-cashing operations use them to sock away images of checks they receive. And some banks pay them to store images of customers' checks, so the customers can see them when they log in to their online banking accounts.

The criminals downloaded all the images they could find, grabbing bank routing numbers, names and addresses and even signatures of legitimate account holders. They used the information to create their own checks using easy-to-acquire software and printers.

Because all the account information is real and the victims don't know their accounts have been compromised, the odds of the checks going through are high.

SecureWorks notified the three sites and said they have closed their security holes, but warned that the scam is ongoing and targeting other, similar sites.

"It's not the standard kind of criminal operation," Joe Stewart, director of malware research for SecureWorks' Counter Threat Unit, told The Associated Press ahead of the report's scheduled release Wednesday.

"Check counterfeiting is kind of old school, but these guys have figured out how to make it highly automated," he said. "They can get all this data and use that to write counterfeit checks all day long."

The research was being released in conjunction with the Black Hat computer security conference in Las Vegas, which runs Wednesday and Thursday and draws security professionals from around the world to hear about the latest vulnerabilities and attacks and ways to thwart criminals.

Notable presentations this year are to include a demonstration of how to break into widely used ATMs, a talk that was pulled last year by the researcher's employer after complaints from the ATM maker. Researchers are also expected to discuss vulnerabilities in smart phones and in the technology used to secure online transactions.

A consistent theme at Black Hat, and at the related DefCon conference this weekend in Las Vegas, is that most Internet criminals are now motivated by money rather than mayhem. And they're getting more clever in their approaches as banks and other valuable targets tighten their security, as SecureWorks' three-month investigation into the check-counterfeiting ring found.

Dan Clements, a computer security expert who wasn't involved in SecureWorks' research, said the scheme represents a "very significant" escalation of the abilities of online crooks.

He said people should watch for small test charges that criminals make to figure out which accounts are still active, and avoid writing their driver's license numbers and other personal details on checks. He said the attackers were shrewd in their choice of targets.

"I think it's brilliant — it's where the data is," he said. "It's a way to get into these accounts and they don't need to be in the country."

It's unclear how much of the $9 million in that scam the criminals actually got to keep.

The main bottleneck lies with the "money mules" — people recruited from online job sites to launder the money.

They were sent the bogus checks — via overnight shipping paid for with stolen credit cards — and asked to deposit them into their own bank accounts. They were then supposed to wire a portion to accounts in Russia.

Stewart said the six "mules" he was able to reach all told him they hadn't wired any money to the criminals because either they or their banks got suspicious. Many more likely did wire the money, however.

Stewart uncovered the scam while investigating malicious software that steals banking passwords.

In eavesdropping on one criminal group's communications, which he was able to do by infecting his own computer with the malicious program the group was using, he noticed that they were doing something unexpected: collecting massive amounts of images of checks.

He found a file logging all of their transactions, which revealed that 3,285 checks were written against 1,280 accounts since June 2009. Most checks were written for less than $3,000 to evade banks' anti-fraud measures. Overall, he saw about 200,000 stolen check images — suggesting the criminals have only exploited a fraction of the accounts on which they have information.

SecureWorks isn't identifying the hacked sites.

What is a fake check scam?
It's a fast-growing fraud that could cost you thousands of dollars. There are many types of fake check scams, but it all starts when someone gives you a realistic-looking check or money order and asks you to send cash somewhere in return. It's phony, and so is the person's story, but that may take weeks to discover. Now your bank wants the money back. However, just because you can get the cash doesn't mean the check or money order is good. Ultimately, you are responsible for the checks or money orders you deposit or cash. That's how the scam works.

Counterfeit check from Internet source security guide

Think of it as one more reason not to write checks. Hackers believed to be operating out of Russia have figured out a high-tech way to carry out the decidedly low-tech crime of check fraud, a computer security company says — writing at least $9 million in fakes against more than 1,200 legitimate accounts.

But these hackers got the account information in an unusual way: They broke into three websites that specialize in a little-known type of business — archiving check images online.

Check counterfeiting is a crime that savvy Internet criminals usually pass up. After all, it's far easier for them to make money by stealing credit cards and online banking passwords.

The scam was discovered by SecureWorks Inc., an Atlanta computer security company. The organization says it is working with the FBI and says the hackers have not been caught.

Retailers and other businesses use the sites to store records of all the checks they write. Check-cashing operations use them to sock away images of checks they receive. And some banks pay them to store images of customers' checks, so the customers can see them when they log in to their online banking accounts.

The criminals downloaded all the images they could find, grabbing bank routing numbers, names and addresses and even signatures of legitimate account holders. They used the information to create their own checks using easy-to-acquire software and printers.

Because all the account information is real and the victims don't know their accounts have been compromised, the odds of the checks going through are high.

SecureWorks notified the three sites and said they have closed their security holes, but warned that the scam is ongoing and targeting other, similar sites.

"It's not the standard kind of criminal operation," Joe Stewart, director of malware research for SecureWorks' Counter Threat Unit, told The Associated Press ahead of the report's scheduled release Wednesday.

"Check counterfeiting is kind of old school, but these guys have figured out how to make it highly automated," he said. "They can get all this data and use that to write counterfeit checks all day long."

The research was being released in conjunction with the Black Hat computer security conference in Las Vegas, which runs Wednesday and Thursday and draws security professionals from around the world to hear about the latest vulnerabilities and attacks and ways to thwart criminals.

Notable presentations this year are to include a demonstration of how to break into widely used ATMs, a talk that was pulled last year by the researcher's employer after complaints from the ATM maker. Researchers are also expected to discuss vulnerabilities in smart phones and in the technology used to secure online transactions.

A consistent theme at Black Hat, and at the related DefCon conference this weekend in Las Vegas, is that most Internet criminals are now motivated by money rather than mayhem. And they're getting more clever in their approaches as banks and other valuable targets tighten their security, as SecureWorks' three-month investigation into the check-counterfeiting ring found.

Dan Clements, a computer security expert who wasn't involved in SecureWorks' research, said the scheme represents a "very significant" escalation of the abilities of online crooks.

He said people should watch for small test charges that criminals make to figure out which accounts are still active, and avoid writing their driver's license numbers and other personal details on checks. He said the attackers were shrewd in their choice of targets.

"I think it's brilliant — it's where the data is," he said. "It's a way to get into these accounts and they don't need to be in the country."

It's unclear how much of the $9 million in that scam the criminals actually got to keep.

The main bottleneck lies with the "money mules" — people recruited from online job sites to launder the money.

They were sent the bogus checks — via overnight shipping paid for with stolen credit cards — and asked to deposit them into their own bank accounts. They were then supposed to wire a portion to accounts in Russia.

Stewart said the six "mules" he was able to reach all told him they hadn't wired any money to the criminals because either they or their banks got suspicious. Many more likely did wire the money, however.

Stewart uncovered the scam while investigating malicious software that steals banking passwords.

In eavesdropping on one criminal group's communications, which he was able to do by infecting his own computer with the malicious program the group was using, he noticed that they were doing something unexpected: collecting massive amounts of images of checks.

He found a file logging all of their transactions, which revealed that 3,285 checks were written against 1,280 accounts since June 2009. Most checks were written for less than $3,000 to evade banks' anti-fraud measures. Overall, he saw about 200,000 stolen check images — suggesting the criminals have only exploited a fraction of the accounts on which they have information.

SecureWorks isn't identifying the hacked sites.

What is a fake check scam?
It's a fast-growing fraud that could cost you thousands of dollars. There are many types of fake check scams, but it all starts when someone gives you a realistic-looking check or money order and asks you to send cash somewhere in return. It's phony, and so is the person's story, but that may take weeks to discover. Now your bank wants the money back. However, just because you can get the cash doesn't mean the check or money order is good. Ultimately, you are responsible for the checks or money orders you deposit or cash. That's how the scam works.

counterfeit check from Internet source

Think of it as one more reason not to write checks. Hackers believed to be operating out of Russia have figured out a high-tech way to carry out the decidedly low-tech crime of check fraud, a computer security company says — writing at least $9 million in fakes against more than 1,200 legitimate accounts.


But these hackers got the account information in an unusual way: They broke into three websites that specialize in a little-known type of business — archiving check images online.

Check counterfeiting is a crime that savvy Internet criminals usually pass up. After all, it's far easier for them to make money by stealing credit cards and online banking passwords.

The scam was discovered by SecureWorks Inc., an Atlanta computer security company. The organization says it is working with the FBI and says the hackers have not been caught.

Retailers and other businesses use the sites to store records of all the checks they write. Check-cashing operations use them to sock away images of checks they receive. And some banks pay them to store images of customers' checks, so the customers can see them when they log in to their online banking accounts.

The criminals downloaded all the images they could find, grabbing bank routing numbers, names and addresses and even signatures of legitimate account holders. They used the information to create their own checks using easy-to-acquire software and printers.

Because all the account information is real and the victims don't know their accounts have been compromised, the odds of the checks going through are high.

SecureWorks notified the three sites and said they have closed their security holes, but warned that the scam is ongoing and targeting other, similar sites.



"It's not the standard kind of criminal operation," Joe Stewart, director of malware research for SecureWorks' Counter Threat Unit, told The Associated Press ahead of the report's scheduled release Wednesday.

"Check counterfeiting is kind of old school, but these guys have figured out how to make it highly automated," he said. "They can get all this data and use that to write counterfeit checks all day long."

The research was being released in conjunction with the Black Hat computer security conference in Las Vegas, which runs Wednesday and Thursday and draws security professionals from around the world to hear about the latest vulnerabilities and attacks and ways to thwart criminals.

Notable presentations this year are to include a demonstration of how to break into widely used ATMs, a talk that was pulled last year by the researcher's employer after complaints from the ATM maker. Researchers are also expected to discuss vulnerabilities in smart phones and in the technology used to secure online transactions.

A consistent theme at Black Hat, and at the related DefCon conference this weekend in Las Vegas, is that most Internet criminals are now motivated by money rather than mayhem. And they're getting more clever in their approaches as banks and other valuable targets tighten their security, as SecureWorks' three-month investigation into the check-counterfeiting ring found.

Dan Clements, a computer security expert who wasn't involved in SecureWorks' research, said the scheme represents a "very significant" escalation of the abilities of online crooks.

He said people should watch for small test charges that criminals make to figure out which accounts are still active, and avoid writing their driver's license numbers and other personal details on checks. He said the attackers were shrewd in their choice of targets.

"I think it's brilliant — it's where the data is," he said. "It's a way to get into these accounts and they don't need to be in the country."

It's unclear how much of the $9 million in that scam the criminals actually got to keep.

The main bottleneck lies with the "money mules" — people recruited from online job sites to launder the money.

They were sent the bogus checks — via overnight shipping paid for with stolen credit cards — and asked to deposit them into their own bank accounts. They were then supposed to wire a portion to accounts in Russia.

Stewart said the six "mules" he was able to reach all told him they hadn't wired any money to the criminals because either they or their banks got suspicious. Many more likely did wire the money, however.

Stewart uncovered the scam while investigating malicious software that steals banking passwords.

In eavesdropping on one criminal group's communications, which he was able to do by infecting his own computer with the malicious program the group was using, he noticed that they were doing something unexpected: collecting massive amounts of images of checks.

He found a file logging all of their transactions, which revealed that 3,285 checks were written against 1,280 accounts since June 2009. Most checks were written for less than $3,000 to evade banks' anti-fraud measures. Overall, he saw about 200,000 stolen check images — suggesting the criminals have only exploited a fraction of the accounts on which they have information.

SecureWorks isn't identifying the hacked sites.

What is a fake check scam?

It's a fast-growing fraud that could cost you thousands of dollars. There are many types of fake check scams, but it all starts when someone gives you a realistic-looking check or money order and asks you to send cash somewhere in return. It's phony, and so is the person's story, but that may take weeks to discover. Now your bank wants the money back. However, just because you can get the cash doesn't mean the check or money order is good. Ultimately, you are responsible for the checks or money orders you deposit or cash. That's how the scam works.

counterfeit check from Internet source

Think of it as one more reason not to write checks. Hackers believed to be operating out of Russia have figured out a high-tech way to carry out the decidedly low-tech crime of check fraud, a computer security company says — writing at least $9 million in fakes against more than 1,200 legitimate accounts.


But these hackers got the account information in an unusual way: They broke into three websites that specialize in a little-known type of business — archiving check images online.

Check counterfeiting is a crime that savvy Internet criminals usually pass up. After all, it's far easier for them to make money by stealing credit cards and online banking passwords.

The scam was discovered by SecureWorks Inc., an Atlanta computer security company. The organization says it is working with the FBI and says the hackers have not been caught.

Retailers and other businesses use the sites to store records of all the checks they write. Check-cashing operations use them to sock away images of checks they receive. And some banks pay them to store images of customers' checks, so the customers can see them when they log in to their online banking accounts.

The criminals downloaded all the images they could find, grabbing bank routing numbers, names and addresses and even signatures of legitimate account holders. They used the information to create their own checks using easy-to-acquire software and printers.

Because all the account information is real and the victims don't know their accounts have been compromised, the odds of the checks going through are high.

SecureWorks notified the three sites and said they have closed their security holes, but warned that the scam is ongoing and targeting other, similar sites.



"It's not the standard kind of criminal operation," Joe Stewart, director of malware research for SecureWorks' Counter Threat Unit, told The Associated Press ahead of the report's scheduled release Wednesday.

"Check counterfeiting is kind of old school, but these guys have figured out how to make it highly automated," he said. "They can get all this data and use that to write counterfeit checks all day long."

The research was being released in conjunction with the Black Hat computer security conference in Las Vegas, which runs Wednesday and Thursday and draws security professionals from around the world to hear about the latest vulnerabilities and attacks and ways to thwart criminals.

Notable presentations this year are to include a demonstration of how to break into widely used ATMs, a talk that was pulled last year by the researcher's employer after complaints from the ATM maker. Researchers are also expected to discuss vulnerabilities in smart phones and in the technology used to secure online transactions.

A consistent theme at Black Hat, and at the related DefCon conference this weekend in Las Vegas, is that most Internet criminals are now motivated by money rather than mayhem. And they're getting more clever in their approaches as banks and other valuable targets tighten their security, as SecureWorks' three-month investigation into the check-counterfeiting ring found.

Dan Clements, a computer security expert who wasn't involved in SecureWorks' research, said the scheme represents a "very significant" escalation of the abilities of online crooks.

He said people should watch for small test charges that criminals make to figure out which accounts are still active, and avoid writing their driver's license numbers and other personal details on checks. He said the attackers were shrewd in their choice of targets.

"I think it's brilliant — it's where the data is," he said. "It's a way to get into these accounts and they don't need to be in the country."

It's unclear how much of the $9 million in that scam the criminals actually got to keep.

The main bottleneck lies with the "money mules" — people recruited from online job sites to launder the money.

They were sent the bogus checks — via overnight shipping paid for with stolen credit cards — and asked to deposit them into their own bank accounts. They were then supposed to wire a portion to accounts in Russia.

Stewart said the six "mules" he was able to reach all told him they hadn't wired any money to the criminals because either they or their banks got suspicious. Many more likely did wire the money, however.

Stewart uncovered the scam while investigating malicious software that steals banking passwords.

In eavesdropping on one criminal group's communications, which he was able to do by infecting his own computer with the malicious program the group was using, he noticed that they were doing something unexpected: collecting massive amounts of images of checks.

He found a file logging all of their transactions, which revealed that 3,285 checks were written against 1,280 accounts since June 2009. Most checks were written for less than $3,000 to evade banks' anti-fraud measures. Overall, he saw about 200,000 stolen check images — suggesting the criminals have only exploited a fraction of the accounts on which they have information.

SecureWorks isn't identifying the hacked sites.

What is a fake check scam?

It's a fast-growing fraud that could cost you thousands of dollars. There are many types of fake check scams, but it all starts when someone gives you a realistic-looking check or money order and asks you to send cash somewhere in return. It's phony, and so is the person's story, but that may take weeks to discover. Now your bank wants the money back. However, just because you can get the cash doesn't mean the check or money order is good. Ultimately, you are responsible for the checks or money orders you deposit or cash. That's how the scam works.